The Peter Zeihan Podcast Series - China's Energy Problem and Dealing with the Taliban || Peter Zeihan

Episode Date: January 18, 2024

When one of your best options for securing an energy supply route is with the Pakistani Taliban, you know you've got some problems. So go ahead and add that one to China's ever-growing list of 'shit to figure out.' Full Newsletter: https://mailchi.mp/zeihan/chinas-energy-problem

Hey, everybody. Peter Zine here coming to you from the Chicago Lakeshore. Today's topic is China's difficulty in securing energy supplies really about anywhere. The trigger for me for this one is something that happened a couple weeks ago. We had one of the regional chiefs of a group called TTP. The name is right here, also known as the Pakistani Taliban. Now, for those of you who have not blocked out the entire 20 years of the war on terror, Remember, the TTP was one of the groups that really plagued the United States and getting supplies from the Guar Fort in Western Pakistan up into Afghanistan. A secondary route was going for Grotche North.

TTP controls a lot of the countryside. A lot of western and especially northern Pakistan is dry to desert and rugged and mountainous. And so you can easily have a militant group that just snarl supply lines. Anyway, this guy a couple weeks ago, said that he's perfectly willing to allow the Chinese to build their massive infrastructure project through Pakistan as long as his tribe gets 5% protection money, which he knows kind of novel that he's got a business model like that. Anyway, he means it, and he's made it very clear that he and his people are willing to attack the infrastructure, the construction sites, and the workers. He made them very explicit in the statements,

and it kind of leaves the Chinese reeling. One of the things that people forget about the Chinese is there's always this weird assumption in the West and China is that China is somehow different from all the powers that have come before and if you just introduce a new major power to the area everyone's going to just buddy up to them because they're not what came before and that's just never true

the Chinese generate just as much mal-feeling as everybody else and they're seen as just another imperial power in most zones and for the Chinese this has always been more of a problem than has been to the Western powers because if you're Britain or France

or Spain or any of the old imperial set. Yes, there's always issues with getting access to energy, but you're relatively proximate to a lot of them. So, for example, if you're, say, disfranes. You know, Algeria is right across the Mediterranean as is Libya. Ah, go around the bulge of Africa and you're in Nigeria. Or you can go over to Suez, and all of a sudden you're in the Middle East and the Persian Gulf region, and so there's a crew to plenty.

There's multiple routes to choose from, and not that any of them are super, easy, but it's not like any of them are super complicated. Even for the United States, back in the days before shale, when we had to import a lot, we could go from the west coast to Southeast Asia, we could go south to Mexico and Latin America, or you go east to all those normal places in Africa in the Middle East. There were options, there were always options. And that meant that the United States, even if you ignore the fact that it rules the oceans, still had options for keeping the lights on. Chinese have never had that.

By the time that China expanded to the point that it needed all the energy, Southeast Asia was already largely tapped, so they need to go around Singapore, by India, and into the Persian Gulf, where they have to deal with either the Iranians or the Saudis or the Kuwaitis or wherever else. And that's really been the only play.

It has always been the only play. And that means they've had a hard time with security. So we're posting with this video, a graphic that it was originally in my second book, Absent Superpower, that we've updated with more current data. This is the best data we have as of the point that COVID hit.

After that, the data is it'll be a couple more years before we get post-COVID data that's any good. And it gives you an idea of just the scale, the volume, and the range that the Chinese have to deal with in order to get fuel. So starting

west to east, you've got the Persian Gulf where they find themselves having to pick sides. Everyone thinks that they're going to go with the Iranians because the Saudis had traditionally been more pro-American, but Saudis export an order of magnitude almost more crude than the Iranians, not to mention that if you said with the Iranians,

you're going to have problems with the Kuwaitis or the Qataris or the Omanis. There's no clear answer here, except for to try to replace the United States as the dominant power within the Persian Gulf, and the Chinese absolutely lack the military reach to do that. Then, assuming they can get past all of those local problems, they have to get by India, which I don't know if you've been following the news, but for the last 80 years, the Indians and the Chinese haven't much cared for one another. And while the Indian Navy is not great, the Indian Navy operates by India.

And so there's nothing, nothing that the Chinese could do if it came to a fight to protect their civilian shipping there. Then they have to get by Singapore, which is a tight American ally, and she even maintains a birth for an, American supercarriers. They go within a range of the missile systems that the Australians have. They go by the coast of Vietnam. Who hates, hates, hates, hates so much. They go by with the Philippines, which is another U.S. ally. And if you want to get into Northern China, you now have to go by Taiwan. And again, if you haven't been following the news, Taiwan and China don't get along very well. And this whole time, you have to deal with both the American Navy and the Japanese Navy, which may have fewer ships, but they have longer range and more lethality. So there's...

There's no solution here on the water. The hope with Pakistan is that eventually you can build an infrastructure corridor from Pakistan up over the mountains and into Western China, where you can at least bypass those latter series of obstacles. The problem here is that running a pipe up and over a mountain passes is really, really hard. That's why no one does it right now. And now if you've got local terrorists, they're just deciding to blow everything up, It's just one more problem.

So if there was an easy solution here, it would have been found decades ago, but there's not, which means that China remains the most vulnerable power of all of the major powers throughout human history. They're completely dependent upon an international security arrangement that they can't protect, they can't influence, and certainly can't replace. Well, one more thing. Well, a lot of this news is bad, I mean, very bad for the Chinese. In fact, worse than it is for any of the other major powers.

It's not all negative. China's problem was with liquid fuels that are derived from oil. So jet fuel, gasoline, diesel, things like that. Those are the things that they're going to lose access to at scale. But solid fuels, most notably coal, soft, brown, low-quality coal is something they have in huge volumes at home. So even in the worst-case scenario for external security situations and energy crises, they're still going to be able to produce coal for their own domestic system.

So if you're willing to put up with just ridiculous carbon emissions and atrocious air quality, the Chinese do have the ability to keep the lights on. They can generate electricity for all of their needs. That's not going to save them from all of the other problems, but at least they won't be suffering in the cold and in the dark.